1 Answer
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They released the steam into the space between the reactor pressure container and the outer wall (sheet metal, deliberately to work as a kind of rupture seal?). Maybe they hoped that some of this substances would condense there when the steam cools down? But because there was a lot of Hydrogen in the steam, explosions blew away the sheet metal.

The reason for the ignition of the hydogen/air mixture is not known. Maybe the temperature of some hot parts of the pressure vessel did that.

Edit
Inside the reactor vessel the hydrogen cannot explode, there is no oxygen available.
And:
All this was dealt already in two treads. Search for Fukushima.

What are the reasons for releasing the gas inward the building rather than outwards, needlessly exposing staff to radiation?
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artistoexMar 17 '11 at 18:18

Where do You know from that there was some staff there? Even without radioactivity, from steam (!) alone everybody there would have been killed imediately. Concerning "reason" I wrote a assumption.
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GeorgMar 17 '11 at 18:24

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It was just a naive assumption on my part.
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artistoexMar 17 '11 at 19:08